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When can I deduct the legal fees from my taxes?

LEGAL FEES

You may not know that in certain circumstances, you may be able to claim part or all of the legal fees that you have paid in the context of your family matter (within or outside of a court action) as a tax deduction on your tax return. But not all legal fees: only those incurred with respect to the enforcement or establishment of child and/or spousal support.

In all cases, you must be the recipient of child or spousal support. If you are the payor, even if you were successful in defending, reducing or terminating your support obligations, you will not be able to claim a tax deduction for the legal fees paid to achieve that result.

In summary, a recipient can claim a tax deduction for the legal fees incurred to:

  • Collect late support payments
  • Establish the amount of support payments from their current or former spouse or common-law partner
  • Establish the amount of support payments from the legal parent of their child (who is not their current or former spouse or common-law partner) where the support is payable under the terms of a court order
  • Try to get an increase in support payments.

If you were required to bring your matter before the family court and, having been successful, the court forces your ex-partner to reimburse some of the legal fees that you have incurred (called "costs"), then the amount of legal fees you can deduct from your taxes will be reduced accordingly. To be able to claim those legal fees, you will normally be required by Canada revenue agency to present a letter from your lawyer confirming the portion of the legal fees you have paid relating to the support order or agreement. At ALT Divorce, we routinely provide in February of each year tax letters to all clients who incurred legal fees for the purpose of establishing, increasing or collecting support. If for whatever reason you have not received yours, do not hesitate to communicate with us.

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